Optimal Intertemporal Curative Drug Expenses: The Case of Hepatitis C in France

Abstract

We study intertemporal trade-offs that health authorities (HAs) face when considering the control of an epidemy using innovative curative medical treatments. We set up a dynamically controlled Susceptibles-Infected-Recovered (SIR) model for an epidemy in which patients can be asymptomatic, and we analyze in a simple model, the optimality conditions of the sequence of cure expenses decided by HAs at the onset of the drug innovation. We show that analytical conclusions are ambiguous because of their dependence on parameter values. As an application, we focus on the case-study of Hepatitis C whose treatment underwent a major up-heaval when curative drugs were introduced in 2014. We calibrate our controlled SIR model using French data and simulate optimal policies. We show that the optimal policy entails some front loading of the intertemporal budget compared to fixed annual ones. The analysis demonstrates how beneficial the intertemporal budgeting can be compared to non forward looking constant budget allocation.

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Replaced by

Pierre Dubois, and Thierry Magnac, “Optimal Intertemporal Curative Drug Expenses: The Case of Hepatitis C in France”, Journal of Health Economics, vol. 94, n. 102861, March 2024.

Reference

Pierre Dubois, and Thierry Magnac, “Optimal Intertemporal Curative Drug Expenses: The Case of Hepatitis C in France”, TSE Working Paper, n. 23-1402, January 2023.